This publication presents the results of the 2001-02 Employment Services Survey. This survey is conducted periodically by the ABS to provide a detailed measure of the performance and structure of organisations operating in Australia that generate income predominantly from employment services. The main focus of the survey was on understanding aspects such as the number and nature of job placements made, the composition of the income generated by employment services organisations, details of the expenses incurred, the characteristics of the direct and indirect workforce and the nature of"for profit" and "not for profit" organisations involved in these activities. Organisations that operate for profit are referred to as for profitsin this publication, while organisations that operate not for profit are referred to as not for profits.

For the purpose of this survey, Employment Services included organisations with a predominant activity of employment placement. Employment placement included: temporary labour hire by service providers to other businesses using their own employees, on a fee or contract basis, and placement of permanent or temporary staff directly employed by a client organisation. Organisations whose main income was generated primarily from other related employment services such as preparation of curricula vitae, counselling, training or other support services for job seekers, were excluded from the results of this survey.

Snapshot of employment services organisations

At the end of June 2002 there were 2,704 employment services organisations operating in Australia, comprising 2,445 for profits and 259 not for profits. These organisations had direct employment of 32,077 persons.

Income generated by these organisations was $10,228.5m in 2001-02; for profits accounted for $9,207.2m of this income and not for profits $1,021.3m. The profit margin/surplus for all organisations was 2.9%.

Employment services organisations tended to be small employers: 59.4% had four or fewer persons directly employed, and 20.1% had direct employment of 5-9 persons. Only 1.4% of all organisations had direct employment of 100 or more persons.

The total industry value added (IVA) by employment placement organisations was $8,866.7m, contributing 1.3% to Australian gross domestic product (GDP) for 2001-02. The derivation of IVA differs for organisations in the market and non-market sectors, therefore caution should be used when making comparisons between organisations in these two sectors. These differences can be found in the Glossary. For profits accounted for 91.8% ($8,138.7m) of the total IVA, while not for profits generated 8.2% ($728m).

Employment placements

A total of 3,738,900 placements were made in 2001-02; of this total 424,400 were permanent and 3,314,500 temporary/contract placements.

Permanent placements were predominantly made by large organisations (those with direct employment of 100 or more persons) whereas smaller organisations (those with direct employment of fewer than 20 persons) reported more temporary/contract placements. Large organisations accounted for 61.9% of all permanent placements, and only 18.4% of all temporary/contract placements, while smaller organisations accounted for 63.3% of all temporary/contract placements, and only 20% of all permanent placements.

Employment placement activity varied by type of sector. Of the total employment placement activity undertaken by not for profits, 76% was government supported placement activity, 19.2% was other temporary/contract placement activity, and 4.7% other permanent placement activity. For profits comprised a different profile with 90.3% of activity focused on other temporary/contract placements and only 4.6% on government supported activity.

The major areas of employment placement were in health care and medical occupations (1,235,400), trade, labour and related occupations (1,033,100), and clerical occupations (610,400). G1 shows that permanent placements were highest in the trade, labour and related occupations (151,400 or 35.7% of total permanent placements), and clerical occupations (104,100 or 24.5%). Health care and medical occupations dominated temporary/contract placements (1,219,000 or 36.8% of total temporary/contract placements), followed by trade, labour and related occupations (881,700 or 26.6%), and clerical (506,300 or 15.3%).

G1 JOB PLACEMENTS BY OCCUPATION
Proportion of total permanent and total temporary/contract placements

For each permanent placement in health care and medical occupations, there were 74.3 temporary/contract placements in this same occupation group. This ratio of temporary placements reflects the nature of the nursing industry where placements are often made for a single shift, resulting in a very high number of placements per year for each indirect employee. The next highest ratio of temporary/contract placements was hospitality, travel and tourism occupations at 8.1 temporary/contract placements per permanent placement, followed by trade, labour and related occupations, at 5.8 temporary/contract placements per permanent placement. General management/executive occupations was the only occupation category where more permanent placements were made (17,100) than temporary/contract placements (10,600).

Income

Employment services organisations generated $10,228.5m in income in 2001-02, representing an average of $318,900 per person directly employed. The major source of income was income received from clients, $9,308m (excluding income from government supported schemes). This total comprised the following types of client income: temporary/contract placements ($8,250.2m), permanent placement/personnel recruitment ($879.2m), other employment services ($131.1m), and provision of training services ($47.5m).

Excluding government supported placement activity, an average permanent placement/personnel recruitment services income of $4,600 was earned for each permanent placement. The average temporary and job contract placements income was $2,600 for each temporary/contract placement.

Micro organisations, those with four or fewer persons directly employed, generated $1,614.2m in income (15.8%) and had an average income of $524,600 per person directly employed. Large organisations, those with 100 or more persons, generated $4,005m in income (39.2%) and averaged $308,100 per person directly employed.

Not for profits generated their income from different sources than for profit organisations. Not for profits generated 45% of their total income from client payments, 29.5% from government supported schemes, and 21.4% from other government funding. The majority of for profit income was generated from client payments (96.1%). Government supported schemes and other government funding accounted for only 3% and 0.1% of total income for these organisations.

Employment

Total employment of employment placement organisations at the end of June 2002 was 322,192 persons, comprising 32,077 direct employment and 290,115 indirect employment.

The total direct employment of employment services organisations at the end of June 2002 was 32,077 persons. Most staff (17,744 or 55.3%) were employed as employment/recruitment consultants, while 11,397 (35.5%) were employed as management and administrative support staff.

The majority of total direct employment comprised permanent full-time employees, (24,479 or 76.3%). There were 956 working proprietors/partners of unincorporated organisations, accounting for 3% of total direct employment. Casual employees accounted for 3,427 (10.7%) persons directly employed, and permanent part-time employees, 3,216 (10%).

Employment placement organisations largely comprised females, accounting for 65.2% (20,928) of total direct employment. There were more females than males in all types of direct employment. Females accounted for 63.3% of permanent full-time, 79.4% of permanent part-time, and 69.3% of casual employees. Females also accounted for the majority of all working proprietors/partners (52.2%).

Although employment services largely comprised smaller organisations (79.5% of all organisations had direct employment of 9 or fewer persons), they accounted for only 20.7% of total direct employment. Large organisations represented 1.4% of all organisations and accounted for 40.5% of all direct employment.

The indirect employment of employment services organisations was 290,115 persons at the end of June 2002, or 9 persons for each person directly employed. There were 19,532 apprentices and trainees accounting for 6.7% of total indirect employment.

For profits accounted for 91.2% (293,753) of total employment, 71% (22,764) of direct employment and 93.4% (270,989) of indirect employment. Not for profits accounted for 8.8% (28,440) of total employment, 29% (9,313) of direct employment and 6.6% (19,126) of indirect employment.

ExpenditureTotal expenditure of employment services organisations was $9,937.5m in 2001-02. Labour costs comprised the largest component of all expenses, 84.6%. The labour costs of indirect employees dominated expenditure, comprising 68.3% ($6,786.4m) of all expenditure.

The labour costs of direct employees accounted for 16.3% ($1,621.5m) of total expenses. The average labour cost for a direct employee was $52,100.

Other than labour costs, rent, leasing and hiring was the next highest expense accounting for 2% of total expenditure ($199.9m).

As a proportion of total expenditure, not for profits had higher labour costs for direct employees, accounting for 33.3% ($326.3m) of total expenditure, compared to 14.5% ($1,295.2m) for profits.

States and Territories

Organisations in New South Wales accounted for 39.7% ($4,058.4m) of all income, and had the highest proportion all permanent placements (28.9% or 122,700). Queensland recorded more permanent placements than Victoria (26.8% or 113,800 compared to 24.6% or 104,300), but generated less income than Victoria, 13.1% ($1,338.8m) and 27.3% ($2,796.3m) respectively.

New South Wales accounted for 26.7% of all not for profits and 44% of all for profits. Queensland had the next highest proportion of all not for profits (24.2%), followed by Victoria (21.3%). The reverse was the case for profits with Victoria reporting a higher proportion of these organisations (33.6%) than Queensland (18.1%).

The greatest concentration of not for profits was found in the smallest states and territories. Of the total number of organisations operating in Tasmania, 34% were not for profits. In the Northern Territory, 23.3% of all organisations were not for profits, while the Australian Capital Territory had 18.9%. New South Wales had the lowest concentration of not for profits (6%).

Historical Comparison

Comparisons with results from earlier surveys are useful as an indication of the extent of change over time. However, the survey was not designed to provide highly accurate estimates of change, so any comparisons to results from previous surveys should be made with caution. Estimates of change can be subject to changes to scope and coverage, question wording or high levels of sampling error. Further information can be found in paragraphs 21-26 of the Explanatory Notes.

Taking into consideration these limitations, the 2001-02 survey results suggest that employment services organisations experienced a period of significant growth between 1998-99 and 2001-02. Total income increased by 30.8% over the three years. Growth in total expenditure (34.2%) exceeded the income growth. The largest component of expenditure was labour costs, with a growth of 46%.

The total number of organisations providing employment services increased by 29.2% over the three years. For profits increased by 42.2%, while not for profits decreased by 30.7%.

The growth in employment was not as strong as the growth in income. Total direct employment grew by 10.9% over the three years, while indirect employment increased by 4%. The number of recruitment/employment consultants directly employed by employment services organisations increased by 22.9%.

The total operating profit/surplus before tax of employment services organisations declined by 31.8% between 1998-99 and 2001-02. This contributed to the reduction in the operating profit/surplus margin from 5.6% in 1998-99 to 2.9% in 2001-02.

The total number of placements also experienced growth, rising 36.6% over the three years. Both sectors recorded growth in the number of placements, with for profits recording a higher growth, 37%. Placements by not for profits increased by 31.4%.

1 SUMMARY OF OPERATIONS

2001-02

1998-99 (a)

For profit

Not for profit

Total

Percentage change (%)

Placements during year ended 30 June

'000

^2,736.3

3,509.3

229.6

3,738.9

36.6

Organisations at end June

no.

2,093

2,445

259

2,704

29.2

Locations at end June

Capital city

no.

r3,679

3,481

420

3,901

6.0

Other

no.

r1,334

1,041

605

1,646

23.4

Total

no.

r5,013

4,522

1,025

5,547

10.6

Employment at end June

Direct employment

Recruitment/employment consultants

no.

14,439

13,091

4,653

17,744

22.9

Other direct employees

no.

14,473

9,673

4,660

14,333

-1.0

Total

no.

28,912

22,764

9,313

32,077

10.9

Indirect employment

no.

278,937

270,989

19,126

290,115

4.0

Total

no.

307,849

293,753

28,440

322,192

4.7

Income

Income received from clients

$m

6,900.1

8,848.5

459.5

9,308.0

34.9

Income from government supported schemes (b)

$m

636.2

272.8

301.6

574.4

-9.7

Other income from sales of goods and services

$m

88.9

^73.2

33.4

106.6

19.9

Other sources of income

$m

192.5

^12.7

226.8

239.5

24.4

Total

$m

7,817.7

9,207.2

1,021.3

10,228.5

30.8

Expenses

Labour costs

$m

5,757.7

7,698.0

709.9

8,407.9

46.0

Other expenses

$m

1,646.2

1,260.8

268.8

1,529.6

-7.1

Total

$m

7,404.1

8,958.8

978.6

9,937.5

34.2

Operating profit/surplus before tax

$m

426.1

^247.8

42.7

290.6

-31.8

Operating profit/surplus margin

%

5.6

^2.7

5.4

2.9

. .

Industry value added

$m

na

8,138.7

728.0

8,866.7

. .

^ estimate has a relative standard error of between 10% and 25% and should be used with caution.

r revised

. . not applicable

na not available

(a) Comparisons to historical estimates should be made with caution. Refer to paragraphs 21-26 of the Explanatory Notes.

(b) For further information refer to paragraph 3 of the Explanatory Notes